We deploy capital to get the best risk-return relationship that we can, and therefore new underwriting partners have to compete with existing underwriting partners when we think about that. Obviously, it's reasonably early days in terms of new underwriting partnerships earning through in our result, but as I mentioned in my prepared remarks, their performance is beating those hurdles so far, so they've been performing very well and we're really pleased with that.

Yeah, I mean, we've said before, when we think about new partners, they've got to meet or beats the existing framework when we think about performance. I'm pleased to say that's happening.

Thank you. And then my second question was about the new quota share arrangement. Did you strike that in anticipation of an uptick in growth, streaming growth, or was it more of a surplus management strategy?

Hi, Pablo. It's Johnny here again. This was much more a strategic relationship and something that we'd expect to build out and support our portfolio over the longer term. And as a reminder, it covers all the business that we write, whether that be through the Fidelis Partnership or the new underwriting partners. So it positions as well to scale in either over time.

We'll take our next question from Brian Meredith at UVS.

Yeah, thanks, Dan. I'm just curious, could you talk a little bit about what you're seeing kind of the effect of alternative capital in the marketplace right now?

And maybe kind of remind us or talk about your approach with your thoughts about using you know alternative capital perhaps as a vehicle um to you know capital vehicle for yourself for yourselves yeah it's a great question brian obviously you know we see one of the characteristics of this earning season is conversation around abundant capital and that comes through not just traditional players but as you rightly say alternative capital uh we see more of that interaction uh with our buying hat on thinking about ils and some of the funds that are out there and we do actually think the retrocession market as a buyer uh has been one of the most competitive markets uh for quite a while now but as a buyer you know that's enhancing our outwards reinsurance program uh improving margin and managing volatility so that we've got a long history of trading with alternative capital it's here to stay but it is helping us improve our margin.

Great. It's helpful. Thanks. And then perhaps maybe talk a little bit about the hyperscale opportunity for y'all on data center build out. I know it seems like limits continue to increase there.

Hey, Brian. Yeah, it's Johnny here. Yeah, we still continue to see that to be an attractive opportunity. We've said before our risk appetite in that area is pretty vanilla. We want to stick to the construction risk. We want to stay away from the chips, business interruption, any covers is sort of related to that in any way. But still, it's one of the factors that's driving economic growth, particularly in the US at the moment. And so where we can participate in a vanilla way, then it's something we'll continue to look to do so.

Great, thank you.

Our next question comes from Carol Shamil at Citizens JMP.

Good morning, apologies if this was already mentioned, but can you just specify how large that new quota share agreement is?

Hi Carol, it's Johnny here. That's not something that we're able to disclose at this point in time, but we will continue to give color on that as it evolves over time.

Thank you. That's all.

And next, we'll move to Mike Zoransky at BMO Capital Markets.

Hey, thanks. Good morning. Maybe just a big picture question. um uh thinking through kind of the cycle dynamics um currently versus you know a year or two ago um and kind of your your the roe targets i know that you know a couple years ago you know we were thinking kind of roes we were at the top of the cycle so roes could probably be you know in the teens and you know now the cycle's kind of moving you know moving to a softer marketplace but then also the you know the podest the company has changed a lot too there's you know things have transpired the last couple years so just kind of curious i know you give guidance and really helpful guidance and kind of ratios for for each segment but should we be thinking kind of the consensus how are we you know where they are should we be thinking kind of right the very low end of the range for the foreseeable future given the market dynamics or any kind of thought process you could add would be helpful. Thanks.

Yeah, thanks, Mike. It's Dan here. Great question. So I think we have a lot of confidence in our guidance around ROAE and combined ratios. If you look at the last 12 months, our combined ratios run at 86.4%. So we've been trading through that more competitive term but still being able to deliver our target metrics we don't see any reason to change that halfway through this year we're pretty much on plan and as I said earlier Q3 Q4 we are more of our premium so we would expect those courses to bring us you know in line with our targets 13 to 15 ROAE mid to high 80s combined ratio we think that's achievable we don't see any reason to change that plan at the moment it is more competitive but as a leader you know there's a big bifurcation in the market between lead and follow uh you know we're managing that through

improved um that was reinsurance which is helping the margin but yeah we see no we're confident in our performance metrics for 26. got it uh excellent um very clear and then just lastly on um On some of the share buybacks, is that still an opportunity on the private market versus public market on a go-for basis, what you all have been able to do there?

Yeah, thanks, Mike. It's Alan. Yeah, I mean, in the first half of the year, we purchased $280 million worth of shares. uh 216 of that was through privately negotiated transactions so certainly we were uh we worked with our existing private institutional shareholders to buy back some of their shares um we don't comment on our shareholders um aspirations what they plan to do with their share capital obviously they they've sold down some of their shares we will continue to talk to them when they come to us but right now um you know we'll focus on the open market and work with their private uh shareholders as the need arises got it okay thank you very much and as a final

reminder if you would like to ask a question please press star one we'll pause just a moment and with no further questions that concludes today's question and answer session i apologize we do have one more question alex scott from barclays good morning this is justin on for Alex.

I just had a quick question on the asset-backed finance and portfolio credit. It seemed like the release highlighted that growth was coming from with new partnerships. So, I was just curious if, you know, growth, if there was any growth coming from your existing partners in this line of business.

Hey, Justin. It's Johnny here. I'll take that one. Thanks for the question. yes we've been growing pretty consistently with the Fidelis partnership over the last few years in asset-backed finance and portfolio credit and we think we'll continue to do so the new partnership we onboarded are targeting a slightly different client base so it's the same product a different set of clients with a different geographical focus it's very complementary to what the Fidelis partnership do and that's why we onboarded them but we continue to see both opportunities outside the Fidelis partnership and opportunities to grow with them in this line of business.

Got it. And then as a quick follow-up, I think now, like, if I look at asset-backed and bespoke in general, like, it's about 12 percent, or asset-backed ABF is about 12 percent of your portfolio. So I guess from, like, a portfolio mix standpoint, you guys did mention sort of, like, the diversification benefits of growing into these bespoke areas. Like, should we be thinking about this mix shift more as we think ahead into 27 in terms of like, you know, ABF has been a big contributor to growth in 26? I was just curious if that will, you know, continue to be the case as we kind of like look out into sort of the outer areas as well.

Hey, Justin, it's Johnny again. Yeah, I really think about asset-backed finance as something that's grown steadily over the last four or five years, whereas the other lines of business are much more cyclical in nature. You saw us grow our property DNF book very significantly for a period of time when it was attractive, and then growth slows as the market changes. So looking forward, it's really difficult to predict because we don't know what market will be in next year.

What we know is asset-backed finance portfolio credit, I think, will continue to grow at the same rate, and other lines of business will evaluate the market conditions depending on how they change over time and we'll take another question from andrew anderson with jeffries hey thanks good morning um you've talked about a bifurcation between the lead and the follow markets could you talk about how that dynamic has evolved over the last six to 12 months and how you think about the durability of that bifurcation yeah it's done here so yeah great question i think so looking specifically

say uh at the reinsurance cap renewals mid-year we've heard uh from peers from broker estimates rates are down 15 to 20 percent i think a good example here would be where you're able to leverage your lead position uh which includes obviously your enhanced outwards reinsurance structure but also your ability uh to kind of pivot capacity restructure uh get in first uh we think we're outperforming this metric it'd be closer to single digits for us so i think that that's the kind of delta that we would think about when we or when we talk about the bifurcation of lead uh versus follow verticalized markets etc etc i think we've seen that spread widen a little bit in the last 12 months it does depend a little bit online uh but but yeah i mean it's being a leader has a distinct advantage it gives you a differentiated outcome without any shadow of a out.

Thanks. And when you talk about kind of this quarter's losses, including an element of just random volatility, how do you think about just pricing and portfolio construction? Is there any change in frequency assumptions going forward?

Hey, it's Johnny here. Thanks for the question. I'll take that one. No, we don't see a change in frequency assumption. I mean, we said maybe a year ago that we expect three or four large events per quarter we had one in the first quarter we had five in the second quarter so frequency wise we're still along that same uh run rate uh the middle east um i don't like using this term it's a larger large loss and it's kind of what we'd expect given our market share in that line versus our market share in other lines so again i don't really see any change to the frequency coming the severity rather coming through either and all of that adds up that we don't see a reason to change our guidance and i think the number that punctuates that best is if you look over the trade in 12 months our combined ratio is 86 so right in there in terms of overall profitability

thank you and that concludes today's question and answer session i'd like to turn the call back to dan burrows for closing remarks well thanks everyone we appreciate you joining us today as usual if there are any additional questions we're here to take your calls we thank you very much for your ongoing support and enjoy the remainder of your day thank you that concludes today's conference call thank you for participating you may now disconnect